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Home / Rotorua Daily Post

Whakatane business owners welcome lease relief

Charlotte Jones, Local Democracy Reporter
Bay of Plenty Times·
5 May, 2020 11:03 PM4 mins to read

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Retailers on The Strand have welcomed news the council will provide up to three months' lease relief for commercial and harbour properties. Photo / Troy Baker, Whakatane Beacon

Retailers on The Strand have welcomed news the council will provide up to three months' lease relief for commercial and harbour properties. Photo / Troy Baker, Whakatane Beacon

Whakatane businesses have been feeling the economic strain of Covid-19 and say the council's lease relief will help them stay afloat.

Last week Whakatane District Council voted to provide up to three months' rent relief to impacted commercial and harbour leaseholders. This will have no rating impact as the budget of $600,000 will be drawn from the harbour fund.

Mayor Judy Turner said the lease relief was simply the council being a "good citizen" and helping retailers through this difficult time.

She said Whakatane retailers had done an "amazing job" responding to the crisis and had shown initiative and been proactive in moving to online platforms.

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The council was continuing to provide essential services to the community and these came at a cost which could not just be turned off.

"Getting the balance right between determining the funding required now to support economic recovery, whilst ensuring we are good ancestors for our future generations is front-of-mind for the council," Turner said.

Gerard van Beek, landlord of several businesses on The Strand, said he had nine tenants who had been impacted by the Covid-19 lockdown. Some had been able to do limited trade or trade from home while others had been forced to shut completely.

"Had this been another form of calamity, say fire, earthquake or flooding, most businesses could fall back on business interruption insurance," he said.

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"However, since Sars in 2007, pandemic has become an exclusion and most businesses have no insurance protection from Covid-19. Equally, the standard Auckland Law Lease agreements allow for full rent abatement should a tenant be excluded from a property, leaving landlords reliant on business interruption insurance which again is unavailable.

"Currently the government business recovery package offers little help to small business other that the wage supplement. The loan guarantees, loan top-ups and tax provisions only defer cashflow and liquidity issues."

Van Beek said he had held discussions with his tenants and some had agreed to "share in the pain" of the lockdown to various levels.

Some who were trading in a limited way had been paying 50 per cent of their usual rent while others who had been hit harder were paying less.

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"It is in our interests as the landlord that all our tenants remain viable and are here after Covid-19," he said.

"Most harbour ground leases do not have a rent abatement clause and these remain payable. Due to the current billing cycle our tenants have paid harbour leases through to June as an outgoing.

"The council has an interest in each of its tenant occupier's businesses and it is pleasing to see that a rebate provision is being proposed to assist occupiers, landlords and their tenants. Should a rebate be forthcoming, we will be passing that benefit to our tenants."

EPIC Whakatane Town Centre chairman Warren Short said the decision to provide three months' rent relief for leaseholders, that had to be passed on to tenant businesses, was a great outcome for EPIC and its members.

"The retail sector has been hit hard so we're grateful that the council has heard our concerns and agreed on an approach that will alleviate some of the immediate burden on Whakatane businesses," he said.

Whakamax cinema owner Nick Milne said his team were "super grateful" for any initiatives that could ease the burden of Covid-19.

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"I've heard of stories locally where businesses haven't had any luck negotiating any form of rent relief with their landlords so this will come as a welcome relief," he said.

"We can't open in line with most other businesses that can restart at level 3 or level 2 as we rely on overseas film content, so any cashflow assistance will go a long way until we can open the doors again. Respect to the council for making what might have been a tough decision but definitely the correct one."

However, some feel the relief has not come soon enough and are unsure what it will mean for them and their business.

Stacey Murray, owner of Jean & Pete, said she and her landlord were still waiting for information from the council on the lease relief.

"I feel like I'm in a holding pattern," she said.

"It's a good idea, but it should have come through sooner, rather than waiting until we are all struggling."

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Murray said she would like to see more transparency from the council because she wasn't sure where the money she paid for the harbour lease went.

"I believe they were waiting to see if the Government was going to do anything first before they did," she said.

"They should've been the first to stand up and say 'we'll help'."

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